FX levels to watch – EUR/USD, GBP/USD and AUD/USD

The dollar remains under pressure, with EUR/USD, GBP/USD, and AUD/USD all gaining ground over the past week. With consolidation currently in play, further upside looks likely. 

EUR/USD gradually regaining ground

EUR/USD is on the upward journey within a range that has been in place throughout much of 2018. The recent retracement has been relatively moderate, with the price hitting the 50% level thus far.

Given the shallow nature of this current rebound, there is a strong chance we will see a three-legged retracement, with the price moving into the 61.8% or 76.4% level. As such, while we are expecting to see a move back towards the upper echelons of the range, we could quite easily see a short-term period of weakness beforehand.

GBP/USD consolidates after key break

GBP/USD managed to break through the crucial $1.4244 swing high last week, in turn bringing about a two-month high for the pair.

The next major resistance level to look out for comes at the late-January peak of $1.4346. Until then, we are expecting to see further upside, unless the price manages to break below the most recent swing low (currently $1.4220).

AUD/USD turning higher following pullback

AUD/USD has been recovering ground over the past week, with a falling wedge moving into a crucial 76.4% retracement at $0.7651.

Much of the weakness seen on Friday and in early trade today has been negative, with the price falling close to the $0.7738 swing low. A break below there would point towards a more bearish phase coming into play. However, with the price now starting to recover, it is clear that we could see this rebound continue apace for the time being. 

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